Exotic temptations

Dreaming of a flat in a Dubai tower building or a villa in the Dominican Republic with a view on the Caribbean? Or perhaps an apartment in sunny Spain? You can now buy every possible kind of home abroad – your bank account permitting – through Polish estate agents. At the moment this is only a niche market, but a very promising one

Many a sigh can heard from Polish estate agents these days, as they ruefully complain that: “The Polish housing market has stagnated and the golden days are long gone when Polish investors first cautiously purchased individual homes and later whole packages of flats, pocketing 50, 100 pct – and sometimes more than that – when selling them on. The prices of Polish homes have increased enormously. So, rather than a place on the freezing Baltic sea coast, where there are more rainy than sunny days, perhaps sir or madam would be interested in buying an apartment in sunny …?” – with the name of whichever exotic location inserted by the agent.

Iberian hotspot

Spain’s attractions are its warm climate, friendly relations with foreigners (who crop up not only on the beaches, but also in the land and mortgage registers) and the ease with which apartments are bought. Jacek Szyc, founder of the Carisma Nieruchomości agency, specializing in looking for properties and brokerage services in the selling of apartments, villas and commercial properties outside Poland on both the primary and secondary markets, has much to say about the country’s attractions. Piotr Cicharski, head of Carisma Nieruchomości’s Warsaw branch, told us: “Our company started operating from an office in the TriCity in the 1990s. Today we have several branch offices (in the USA and Warsaw) offering properties and apartments not only in Spain but also in Italy, France, Portugal, Bulgaria and Croatia. But still more than 90 pct of all transactions we close are for apartments in Spain.”

Piotr Ciecharski is of the opinion that the number of people interested in foreign investments is rising by well over 10 pct with each passing year, at the same rate as the expansion of Poland’s middle class.

He goes on: “There are mainly two groups of interested people, the young and energetic, who have built up substantial finance in recent years (e.g. in large corporations) and want to invest it. The second group comprises people whose professional energy is flagging, but who are nevertheless wealthy, looking for investment possibilities and a nice place to relax.” It is no secret that the agency has carried out several commissions for such Polish tycoons as Roman Karkosik and Ryszard Krauze, as well as high-ranking clergy from the Vatican.

RedNet Investment – a member of the RedNet Property Group, which acts as a home sales agent – boasts a huge army of Polish investors who have only sharpened their appetites by investing on the domestic market.

According to Robert Chojnacki, board president of the RedNet Property Group: “We have some 4,000 people registered in our investor’s club, of which around 3,000 are active members who keep a close eye on the products we offer.”

The club, which was founded in 2005 and focused on the Polish market from its outset this year, did have a go at offering homes in Bulgaria and Romania, but the problems which arose during purchases and the not always ethical behaviour of local developers led to RedNet refusing to deepen their involvement in the Balkans.

Robert Chojnacki looks back on this period: “Last autumn we began to notice a gradual stagnation of the Polish market, so we decided to find a country with similar features to those in Poland three years ago. We first studied the markets of countries entering the European Union, but our first serious products turned out to be apartments in Kuala Lumpur, which we started offering this May. All 40 apartments were sold in a matter of days.”

Chojnacki estimates it cost the company around PLN 500,000 to draw up the Malaysian offer for club members, spent on visits to Malaysia, supervising projects and the companies implementing them, and drafting reports on the property market as well as translating documents. The RedNet president refuses to reveal the mysterious partner which assisted the company, only admitting that the company operates from an office in Hong Kong.

A view of a golf course

Jarosław M. Skoczeń, board representative for media affairs at the Emmerson agency, relates that: “Emmerson’s managers had, for a long time, been thinking about moving outside Poland and since we had worked with the owners of Alias Inversiones, we decided that our partner’s roots in the Spanish market would offer a good opportunity to make a first move in Spain.” The partners started to promote their offer by staging a golf tournament in Marbella where Alias has its office (the Warsaw branch in the Sheraton hotel has been closed).

Ryszard Lorens, Alias Inversiones’ owner, adds that: “We wanted our partner in Poland, the country where our customers come from, to be an energetic company with at least several branches. We hope that we can increase sales substantially in a joint effort due to the mutual synergies.”

Up until now, his company has served around 40 to 50 customers yearly, although the Alias head admits that not all negotiations close with a contract being signed. The partners do not yet have a formal joint agreement, although they claim sales of two apartments are almost finalized, with only the finishing touches to be made to the transactions.

In the opinion of Jarosław M. Skoczeń of Emmerson Properties: “It is still too early to speak of substantial results. We are currently focusing on training our workers and outlining our new activities in the media, for which we have advertised ourselves on the TVN 24 television channel and are one of the very few such agents to do so. We also run a campaign in serious magazines that reach potential customers – that is upper middle-class people, such as management personnel, lawyers, company owners etc.”

Trouble at the top

On the subject of their achievements up to the present, Piotr Cicharski notes that: “We are quite definitely the largest operator on the market for selling homes in Spain to Polish investors. We conclude an average of more than 100 transactions annually on average, so if we have any fear of the competition it is rather from huge agency chains which sound out our market from time to time, as Arenal of Spain does.”

It would appear that Polish agencies have decided to take matters into their own hands and compete for a slice of this tempting cake which the Carisma Properties official views with such caution.

Cicharski continues: “It would be nigh on impossible to find out how many homes are taken up by Polish investors, since no such statistics exist anywhere. Apart from that, many contracts are closed directly on the spot without a specialist agency participating. However, having said that, I would put the number at at least 300 to 600 annually, though the real figure may be even 2 to 3 times greater”.

Deluxe Arabian homes

Piotr Droński and his Szczecin-based Rent-nieruchomości Droński agency entered the fray this April when it started tempting investors with attractive apartments in exotic Dubai. He makes much of the fact that his agency is the only one in Poland to deal professionally in selling properties in the capital of the United Arab Emirates. He claims his exclusiveness is the result of the unusual caution which is a standard feature of Arab investors. It is not enough simply to suggest cooperation with them – they must verify the reliability of a potential partner and take the first step in any business venture. And this was how the Szczecin businessman carried out his business there.

But Dubai developers also initiated cooperation with Carisma Properties. The Dubai property sector is snowballing at a terrifying rate with developers looking for purchasers in new markets. Poland, with its large number of money-making residents is, to them, as tasty a morsel as it once was for Spanish business.

According to Anna Kwiatkowska, head of Cushman & Wakefield’s housing department: “Deliveries of new homes to the Spanish housing market are exceeding demand, with a mere 20 pct of finished homes finding owners. The natural outcome is a search for new sales markets. The Polish language can increasingly be heard in foreign sections of our company which deal in apartment sales. At the moment the company is not providing such services in Poland, but can probably be expected to do so in the future.”

A long list of countries has been drawn up in which agencies assist in purchasing apartments, and it is still being added to. Piotr Droński now expects to move into one of James Bond’s old haunts – and since the potential of Montenegro can only be compared with that of Monte Carlo, this is where his next move will be. Droński will be travelling to Budva in September, where he intends to negotiate with Swiss developers who have been unusually active on this market. RedNet Investment is clearly thinking along similar lines and plans to start promoting sales of villas and apartments in the Dominican Republic, with sixty club members to get a taste of Caribbean luxury. All this is increasingly exotic and hugely interesting, but the question is: will profits increase at a similar rate?

Ewa Andrzejewska